Sony to cut 10,000 jobs, shrink costs by $1.8 billion
Sony Corp. said today it will cut 10,000 jobs globally, slash its number of factories and cut costs by $1.8 billion in an ambitious restructuring...
AP Business Writer
TOKYO — Sony Corp. said today it will cut 10,000 jobs globally, slash its number of factories and cut costs by $1.8 billion in an ambitious restructuring bid to revive its stumbling electronics business.
The Japanese company — under new management since March — said it expected a group net loss of $90 million in the current fiscal year as the plunging prices of consumer electronics products have taken a hefty toll on earnings.
The changes, to be put in place by the end of fiscal 2007, which runs through March 2008, would result in a reduction of 4,000 workers in Japan and 6,000 elsewhere, while factories would be cut from the present 65 to 54, company officials said.
The bold turnaround plan comes under the fresh leadership of Howard Stringer, an American-British dual citizen who was named chief executive of the electronics and entertainment company in March as its first foreign head.
Sony has lost money in its electronics sector for two straight fiscal years, and has relied on its movie division such as the popular "Spider-Man" series and its successful PlayStation consoles in its computer video-game unit to lift profits in recent years.
Sony, known as a pioneer in electronics first with the transistor radio and then the Walkman portable music players, has seen some of its glory dimmed by Asian rivals such as Samsung Electronics Co. that are offering cheaper prices.
It has been criticized as falling behind in slimmer TV models, such as liquid-crystal and plasma display sets, that are increasingly popular around the world, losing market share to relative Japanese newcomer Sharp Corp. as well as old-time rival Matsushita Electric Industrial Co., which makes Panasonic brand goods.
Sony also fell behind Apple Computer Inc.'s iPod in what should have been its forte — portable music players. The iPod models are proving a big hit in Japan, where Apple began its iTunes store in August to rave reviews.
Over the past five years, Sony shares have lost two-thirds of their value, and are currently trading at about $36.